The pledge, Labour's first major economic policy commitment, would, in effect, hit rich Londoners, wealthy second home owners and country estates. Low-income Devon and Cornwall would in theory benefit disproportionately.
The surprise announcement was designed to outflank the Conservatives, borrow the Liberal Democrats' listing "mansion tax" plan and distance Mr Miliband from Gordon Brown, who scrapped the lower 10p-in-the-£1 starting rate of tax in 2008.
Mr Miliband said 25 million basic rate taxpayers would benefit, and the plan would see Labour "moving on from the past".
The Labour leader said it was a "mistake" for his predecessor to axe the 10p rate.
The Conservatives said the policy acknowledged Labour's "incompetence" in government. Lib Dems said by the Coalition raising the income tax threshold people were now £600 a year better off.
But Lib Dem Business Secretary Vince Cable – who has long championed the idea of a "mansion tax" – welcomed "Labour's change of heart".
Mr Miliband said the policy demonstrated Labour's "priority to do everything we can to make a difference to people's living standards" – the message he will fight the 2015 general election on.
In principle, the 10p tax rate – lower than the current 20p level – for people on £10,000 to £11,000 should benefit the region.
Average pay in the UK is £26,664 a year – but is much lower in Somerset, where it is £23,595, Devon £22,214, Plymouth £21,978, Cornwall £20,952 and Torbay £19,509.
The 2,300 properties in the South West estimated to be worth more than £2 million – 3.1% of all in that bracket – are very largely second homes in hotspots such as Rock in North Cornwall, and Salcombe in South Devon.
Some Westcountry Lib Dems have been cautious about the policy if it led to the threshold being reduced to £1 million or lower – hitting households on modest incomes or state pensions who are "property rich but cash poor".
Ben Bradshaw, Labour MP for Exeter, said: "This will be great for the Westcountry where we have a lot of people on low incomes who will benefit from a 10p rate and very few properties worth £2 million or more.
"I'm really pleased Ed Miliband will reverse one of Gordon Brown's worst mistakes and has listened to those of us who have been arguing for many years that we need to shift taxation from work to wealth."
The Coalition yesterday championed its rise in the personal allowance – the point at which income tax kicks in – to £9,440, taking two million workers out of paying tax altogether – including all those hit by the 10p abolition.
Mel Stride, Tory MP for Central Devon, said: "Labour have a lot more they need to tell us than just this announcement – like how they will continue to bring down the deficit while presumably reversing the large number of expenditure cuts they have voted against in Parliament.
"Lowering taxes on the less well-off is a good aspiration and we have already taken millions of the low-paid out of tax altogether under this government but a 'mansion tax' is not the right way to go – it will discourage many who have worked hard to get on."
Stephen Gilbert, Liberal Democrat MP for St Austell and Newquay, said: "The Labour party have nothing original to say on the economy or tax reform.
"It's the Liberal Democrats in this government who are delivering a stronger economy in a fairer society and 22 million people are no longer paying tax on that portion of their earnings at all."
